The contribution of cocoa to our economy is no secret. It has, over the years raked in reasonable fractions of our total GDP earnings. It is the only sub-sector of Agriculture in Ghana where it’s main players, the farmers, estimated to be about 900,000 in number are insulated from price volatility.
COCOBOD as an institution enjoys very good credit rating on the international financial markets which is evident from their ability to acquire the biggest soft commodity facility in recent times, ie. the $1.8Bn syndicated loan in September 2016. Coupled with this is the fact that, Ghana produces the best quality in beans supplied to the international market. The effect of that amount in our economy cannot be overstated as it plays a vital role in boosting our foreign reserves thereby strengthening the trading position of our local currency.
Though it sounds good to hear, these monies which have been trickling into the country to serve the purpose of financing the yearly buying operations of cocoa beans from our own farmers have to be repaid back to our lenders. Have we considered the pros and cons if we ended financing the yearly operations of Ghana Cocoa Board with debt?
Won’t it be beneficial for our local financial market and economy as a whole if ownership of Ghana Cocoa Board is shared amongst our local banks, private individuals and representatives of these farmers by listing on Ghana Stock Exchange?
Let’s say our dear national cash cow, COCOBOD in an IPO where about $2Bn is raised as equity capital for COCOBOD. The over 30 commercial banks in Ghana will contribute a fair share of their quota to this thereby having a stake in ownership. What is GCB Bank doing with all it’s deposits? Won’t SSNIT benefit from this kind of investment and be in a more commanding position to be paying retirement benefits for pensioners? Won’t Barclays, Stanbic, Ecobank, Standchart, Access, Zenith Bank contact their parent banks and cough up money easily for this IPO?
The other side of the coin is management. Won’t COCOBOD be better managed when local or multinational local subsidiary banks, through their MDs have a say is how the organisation is run?
Have I talked about financial deepening? Farmers all over have difficulty in accessing credit to finance their operations. Won’t such a relationship make things easier? How about the Local Buying Companies who borrow to fund their buying and haulage operations? They surely won’t be left out.
It seems a long shot as it stands today but I personally believe it’s going to be a revolution for our financial sector should COCOBOD be listed.